A blog for students of Professor Kagan's internet course to comment and highlight class topics. From the various channels for marketing on the internet, to multimedia and e-commerce business models, anything related to the class is fair game.

Tuesday, May 31, 2011

I recently recieved a text that simply stated: Do you want to make a lot of money? It piqued my attention and I opened the message to read the secret pearl of wisdom. The answer was a three step process: 1) Log on to Facebook. 2) Click on the deactivate button in settings. 3) Get to work. I chuckled at the simplicity and the truth in the message. Today, as Professor Kagan mentioned in class. many of us spend most of our time on Facebook. We are constantly updating our status and checking the pages of our friends. The size of Facebook's audience is simply huge with Facebook heading to their 700 millionth user level. Yet, for many businesses, advertising on facebook has not been profitable.
I myself have had the same experience when I attempted to promote on Facebook. I even spoke to Professor Netzer to understand why Facebook with its huge audience reach is not delivering the returns that businesses expect. Almost all major companies are on Facebook. The pull of social media is extremely seductive and everyone seems to jump on the bandwagon with trying to understand their audience. According to Professor Netzer, the reason why facebook fails for many advertisers is the fact that when people are on facebook, they are there to socialize and to have fun. Making a purchase is considered a hindrance and ads are therefore seen as a nuisance. Second, many of the products that are advertised consists of items that are not fun or impulsive purchases. Recently, I came across an ad for a toolkit. It targeted the wrong audience at the wrong time.
Therefore, while there is huge potential in Facebook as a marketing tool, currently the return on advertising dollars have been disappointing for many businesses.

During class, we discussed a few examples of social networks other than the standouts Facebook and Twitter.

I came across a couple of interesting sites over the weekend which I'd like to highlight for the class:

Meetup.com- You may already be familiar with the site, but basically it lets you join groups that are already meeting; allows you to start new meetings; provides resources to find likeminded people who will want to do things with you; and creates opportunities for these groups to get sponsors. This site was extremely useful for me in looking for social media classes for work. It doesn't seem to have any advertising yet, but clearly there are great opportunities for targeting along with sponsorship for PR purposes. For example, a knitting store can post ads to knitting clubs or provide yarn for the club to create awareness of itself.

MePorter.com- I am brand new to this site, on which people can sign up to post their own hyper local news. They can then share news with their friends and invite others to comment, add to the story, sign in as eyewitnesses and post pictures. The site already features ads and has the potential for lots of hyper local targeting.

On all these social networking sites, including Meetup.com, Facebook, Twitter and all the dating sites, it's interesting to note that their success ultimately depends on how many people the site can attract, as well as whether others want to associate with the people on there. Ads and networks are both only as useful as the eyeballs connected to them.

I started this post as a comment to my classmate's post on how well adults recognize marketing, but decided that based on the different specific focus, this deserved to be its own blog post. The other blog post made the point that many people fail to realize that videos are part of a marketing campaign, particularly when these videos are funny in their own right. I not only agree with this point, but take it further by suggesting that the key to a marketing campaign's success is the ability to get consumers to enjoy playing and distributing the company's advertisements because the consumer wants to for his own reasons (i.e. it's funny or useful or interesting enough to watch and pass on to friends).

This raises an interesting question: can a company "create" a viral marketing campaign, and if so, how does one go about this? While I'm sure Professor Kagan is full of thoughts on this, I wanted to open it up to the class for comments.

My own view is that even though one can create a viral marketing campaign, this needs to be done in ways that dramatically diverge from traditional marketing techniques. For example, in the case of funny viral videos, it may make more sense to hire comedic film producers (like the guys from College Humor) to run a funny campaign with or based on your company's product, rather than to rely on people within your company to suddenly "become funny." Similarly, for viral videos based on usefulness, it probably makes sense for a company (especially a startup on a smaller budget) to scour YouTube for relevant experts in the field, and contract with these people directly to promote your product in the same kinds of videos they have produced with millions of hits.

The Internet and sites like YouTube have allowed anybody to become a film-maker on a very small budget, which allows all companies (big and small) to experiment cheaply in trying to create the kind of "viral" campaign that will stick. If even one of these videos actually does "go viral" and become the kind of advertisement that nobody even thinks of as an advertisement you have succeeded. The question is how to make this happen in the first place.

One particular point stood out to me in last week's digital marketing class, and that was that display media is making a comeback. In 2008, I left Razorfish to go work for a small boutique web design agency, and at that time, paid search was "king". As an SEM manager, life was easy in the sense that budget was rarely an issue - it was hard to argue against devoting more $$ to paid search as it proved time and time again to the be the most efficient use of the advertising dollar. Sure, sometimes there was tension between display and search execs in this regard, but we just weren't at the point yet where we could leverage true synergies between the two forms of advertising. Clearly, since that time, things have changed as Professor Kagan explained during last week's class that display media has found ways to be highly efficient (primarily through more and more sophisticated targeting). What I find curious, however, is the willingness of companies to be "boxed in" to standardized IAB ad formats. I know I'm probably wrong, but I really don't believe I've ever clicked on a display ad unit. I don't even notice them. That is the downside of being a "pusher", and not a "puller". It is somewhat mind boggling to me that a group of marketers decided on some grid formats for the internet a while back and we're all subjected to these standard units now that are almost impossible to change due to the headaches created by attempted deviation. I worked on a project with Barry Diller and Tina Brown called theDailyBeast.com, a curated news aggregation site, and we tried to break the mold by refusing to partake in the standard ad unit model and instead created a production heavy, micro-site flavored ad serving structure where "engagement" was the primary metric. In theory, this approach was enticing, though in execution, it still couldn't compete with the CPM rates and efficiencies standardization brought. I leave the class with the question, how sustainable is it to force all display advertising to follow the IAB approach? Is advertising going to become really targeted, but really boring?

Monday, May 30, 2011

The phrase "focus on the goals, not on the metrics alone" jumped out in last week's class. Over and over again I see companies intent on building website traffic, increasing ad impressions or boosting their number of facebook fans, with little understanding of why these activities might (or might not) be important.

Getting millions of people to your website is only valuable if they are qualified leads -- people who you might convert to customers, donors or advocates. If they are there for a reason that isn't core to your business, they might be a waste of resources.

The misalignment of goals and metrics isn't new (see this piece from Bain for a great non-digital example), but because digital marketing is so unfamiliar to many institutions, the possibility of misalignment is greater. Corporate executives are likely to see social media as an inexpensive "experiment" rather than a marketing strategy that is core to their business goals. Companies build digital operations, but approach them with less rigor and lower standards of accountability than other marketing plans.

Of course there are complications in the digital world. It's far more likely that a media mix will be responsible for a boost in sales than any one channel, and tracking back the "why" of success is often impossible. But the digital world offers tremendous opportunity as well. Right now, Facebook and Google allow information-gathering that have tremendous marketing implications.

Even more exciting, as convergence becomes a greater reality, there is opportunity for better conversion metrics on all media platforms -- particularly television. A "clickable commercial" or product placement would offer previously unheard of data directly related to placement, timing and quality of particular ads.

If marketers can remember that creating cool new stuff and attracting eyeballs are not goals unto themselves, there will be unprecedented opportunity to capitalize on new technologies.

I'm sure we've all been here before-- your friend sends you a link to a funny YouTube video and tells you that it will change your world, make you laugh, or at the very least, bring you up to speed on the latest viral video hit.

This past weekend, while with my sister, she told me that "Oh my gosh, have you seen those Old Spice videos? You have to watch them. They're hysterical. HYSTERICAL. SO FUNNY. Get my computer. We'll watch them." What we watched was this video, and then clicked on about a dozen more after. Of course I laughed, but I also turned to her and said, "You realize this is just really good marketing?"

She responded, "Yeah...they're still funny".

She failed to realize that I wasn't asking if the videos were funny, they of course, were/are entertaining. I was asking her if she recognized it (had to and turned out to be) was part of a marketing campaign.

It left me wondering how well adults are able to decipher what is marketing and what is a viral video. And while a viral video must help spread brand awareness (i.e. she referred to it as The Old Spice" video), what tactics are being used to focus on converting those who become aware about the brand into a consumer. Looking forward to learning more about the digital marketing world in order to answer these questions.

Sunday, May 29, 2011

Prof. Kagan’s first class was very enlightening – it was interesting to understand the structures applicable to the numerous internet companies that form an integral part of our daily life. One relevant company I would like to highlight is Zappos.

For those who are not familiar, Zappos is the largest US e-tailer of shoes, and is the perfect example of a company exploiting the long tail. As a dedicated customer of Zappos since 2002, I have numerous accounts of instances where styles and sizes unavailable elsewhere, have popped up on Zappos; and most importantly, at a lower price! Zappos has created a loyal following of repeat customers with their unique business and service model, growing into a $1BN company in less than a decade.(It has been acquired by Amazon as of 2009).

However, there is a contrarian view to their ability to sustain the long tail. Conjecture is that Zappos’ profit margins have eroded significantly, as it has changed its model from previously coordinating delivery between shoe-producer and end-customer, to now stocking merchandise in-house.

In a “Psychology of Media” class I am also taking we have discussed the influence of advertising on children, specifically relating to advertisements made for children.

It is pretty obvious that advertising attempts to influence our reality in order to get us to purchase a product. If it works well with us, how much more successful is advertising with children, especially as they interact with other form of media beyond television such as the Internet?

In the article by Ali, Blades & Oates (2009), “Young children’s ability to recognize advertisements in web page designs” the authors discuss a research which has been done with children in the U.K. and Indonesia ages 6-12. As the Internet has become a growing medium for advertisers to market to a younger audience, the authors examine how well children can accurately recognize an advertisement on the Internet, and discuss how the results from their study have implications for theories on how children develop an understanding of advertising on the Internet and how they could be made more aware of marketing messages on the Internet given the increasing time and importance it plays in children’s lives.

Also for us as marketers, it is important to know and understand to what extent children actually recognize ads and how they respond to them. The fact that children can identify an advertisement does not mean that they understand the nature of advertising. Investigating the effects of unrecognized advertisements on web pages is an important issue for future research, because children’s increasing use of new media means that they are more likely to be exposed to advertisements that they do not recognize as marketing messages.

Wednesday, May 25, 2011

The recent study by Adam Sarner at Gartner justified Prof. Kagen's discussion about the affect of Digital marketing is prominent across various marketing channels. The key findings from his paper were as follows:

Online trend has shifted back to social media, communities and networking aspect of why the Internet was originated.

Marketers now have more opportunity to engage their customers through various digitla channels, devices and social activities.

Adam also predicted that by 2015, digital strategies specially social marketing, will influence at least 80% of consumers' discretionary spending.

The Mass-marketing campaigns with 2% response rate will not sustain.

Adam quoted a great example of the National Basketball Association's Golden State Warriors. How they utilized social campaign through their website to unveil their new logo and raised ticket sales of 440K by spending only5K.

Gartner classify digital marketing into four major type that are contextual, addressable, transactional and social marketing.

Tuesday, May 24, 2011

Let me qualify what I am going to say by clarifying it is opinion based on my sentiments on Facebook and not on research.

Right now any ads run on Facebook are both underpriced with comparison to other advertising inventory online, as well as relatively ineffective. Why?

To me it seems that Facebook faces a conundrum. To keep the main area of their pages "pure" with the social utility of the posting and messaging, they must make Ad space minimal. SO as long as Facebook is as popular as it is, it seems that Ad space will continue to be minimal. BUT if Facebook becomes less popular, either due to novel competition or burnout, then they have space on their pages that could sell like Gold to the LONG TAIL of the remaining users of Facebook.

So either Facebook sells out some of its most loyal users and puts ADs more centrally located in the pages, and makes more money that way, or membership remains extremely high due to new functions and relatively low ads.

During our first lecture, our class also discussed the use of email in online marketing. First, email is the root of almost all internet advertising; it is a terrific way to execute sophisticated marketing campaigns. Almost all interactions between the buyer and seller are recorded via email. To list a few examples, through email, vendors can confirm product purchases, send newsletters, verify a subscriber’s authenticity, distribute discounts to “friends and family,” and of course market themselves. Email marketing expenditures are particularly unique in that the marginal cost of an additional email sent is essential zero, although the cost of the systems that customize and launch emails is high. Given that email expenditures are mostly fixed, marketers strive to maximize the number of emails sent from one system. Considered one of the most important marketing channels, email depends on three types of expenditures: customer retention, customer acquisition, and customer-vendor transaction. Email is also key to consumer authentication and relationship management; one usually has to confirm his or her email’s accuracy to form a relationship with a vendor. Professor Kagan introduced us to some more lingo related to e-mail: Mailbox Provider, Email Service Provider (ESP), Inbox, Junk or Bulk email Folder, Bounce. We will be studying this topic in greater detail during the semester.

In the beginning of the lecture, I was excited to hear that there is a large growing market for online marketing. I was particularly impressed by the substantial growth forecasts for interactive marketing spend in the U.S.; Forrester predicts a 17% CAGR from now to 2014. US online advertising spending is also expected to grow significantly; eMarketer projects 9-12% annual increase until 2014. In addition to discussing growth trends of online marketing, Prof. Kagan introduced acronyms related to digital marketing: CMC (cost per thousand impressions), CPC (cost per click), CPA (cost per action). CMC defines the cost per thousands of ad images (also termed impressions). CPC is the cost per user's mouse click on the ad and CPA is the cost per user's action (when revenue is generated from the ad, for example). When discussing search engines, we learned the difference between SEMs (sponsored links that appear at the top of search results) and SEO (natural links that appear in search results but are not sponsored). The topic of display ads, or space on a website, was also intriguing. Examples of display ads include contextual ads, static images, rich media, and online video. Digital marketing is an entirely new field to me, so I was thrilled to learn about many new topics and the relevant jargon. I look forward to discovering a whole new area of marketing that is becoming increasingly important day by day.

Monday, May 23, 2011

You don't need a class in social media or internet marketing to see the interactive possibilities presented by the Spinning Songbook being employed on Elvis Costello's latest tour. With a giant wheel of fortune populated with his songs instead of prizes, on stage, Elvis and his assistants create an entertaining and unpredictable show as audience members' spins create the night's set list.

This process creates a lot of excitement for the longtime fans of Elvis Costello, many of whom consider him their favorite artist, and who have also seen him perform possibly dozens of times over the years. Spinning Songbook ensures they will hear familiar songs, but also that an artist who usually challenges his fans with new music in person will be somewhat reined in.

As an attendee of last night's show, I was impressed by the amount of cell-phone documentation and communication that was taking place among the 50-ish audience members. Unfortunately, however, there is no provision for the Singing Songbook to be influenced or include the participation of online and social media communities. This is a tremendous missed opportunity for Universal Music, who controls Elvis Costello's catalog, to activate their releases through this attention and discussion.

A contest or a live YouTube broadcast including fans' choices from the net and Elvis' own participation in the online marketing could have exposed this event to many more people than saw it at the 20 or so shows he has just completed. While I appreciate that the paying customers shouldn't have their shows spoiled, it wouldn't have made a difference to the online community to wait until the last shows of the tour.

Greatest hits tours are a fact of life for classic rock artists, and Elvis Costello has a fresh approach (even though he first did this type of show in the mid-80s, it hasn't been adopted by anyone memorable since). His fans are smart and would have been apt to share and discuss, based on their actions at the show last night especially.